WARWICK – As many as 87% of nursing homes in Rhode Island are at financial risk of closure, according to a recent report commissioned by the American Health Care Association.
The May 13 report from Clifton Larson Allen LLC, a Minnesota-based consulting firm, utilized Medicare data through September 2021. It found that 95% of the nursing homes in the Ocean State were losing money while 87% were deemed at “financial risk,” with high probability of closures with operating loses of at least 7.5%. The percentage of those nursing homes at “financial risk” in the state has increased 68% since 2019.
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Clifton Larson Allen could not be immediately reached for comment on how the financial condition of Rhode Island’s nursing homes compares with those in other states. According to the report, 47% of nursing homes nationally are considered at financial risk.
“Rhode Island nursing homes have been hit by the perfect storm,” said John Gage, president of the Warwick-based Rhode Island Health Care Association. “The combination of chronic underfunding by Rhode Island Medicaid [one-quarter of a billion dollars over the past decade], an historic workforce shortage [with 21%-plus of nursing home workers lost in the past two years] and rampant inflation driving up the everyday costs to operate the homes, have created an existential threat to the future viability of Rhode Island nursing homes.”
Rhode Island nursing homes lost 2,096 staff members since 2019 – a 21.1% reduction in the state nursing home workforce, according to The Federal Bureau of Labor Statistics. Since the pandemic started, five nursing homes in Rhode Island have closed, the report said. It is projected there will not be enough beds in Rhode Island to serve those in need by 2027.
Gage also said the passage of the 2021 minimum staffing law doesn’t help the bottom line for the state’s nursing homes. That law, which took effect in Jan. requires an average of at least 3.58 hours of direct nursing care per resident, per day and 3.81 hours starting in 2023. That ratio is among the highest in the nation.
“Unfortunately, these disturbing statistics do not include the costs associated with the 2021 passage of the state’s new minimum staffing law,” Gage said. “This law, is simply impossible to implement, especially at a time with the demonstrated lack of available workers. This will only exacerbate the crisis we now face. Without immediate relief, Rhode Island nursing homes will simply disappear. Rhode Island’s most frail residents deserve much better.”
